A living trust serves to to transfer ownership of property at the time of the owner’s death. When leaving a piece of property in this type of trust for a beneficiary, the item will not need to go through probate, passing straight to the beneficiary. As far as income and estate taxes on the property within the trust, if the property is to be sold at the time of death or up to one year after, there is no federal income taxes. Additionally, if the estate is under $5 million, there will be no estate taxes to pay. As the trustee (oftentimes the creator of the trust) gets older, they can have a successor trustee in place to serve the trust if the creator becomes incapatictated.

Oftentimes, companies provide 401(k) retirement plans for their employees, including a mix of prudent investment options. Millions of Americans—like public school teachers and clergy members—however, are not offered these plans, forcing them to rely of 403(b) plans. Ironically, the people who do the most good get the worst retirement plans. 403(b) plans carry excessive investment fees that can cost the owner tens of thousands of dollars or more. Further, these accounts are not subject to the more stringent rules and consumer protections that the average 401(k) plan is. This Article details several stories of public schools teacher’s fight to retire efficiently.

Putting your home and other assets in a living trust can make things financially and emotionally easier on your loved ones. A living trust is a legal document that holds your assets in trust while alive and transfers those assets to your beneficiaries at death. This type of trust can either be revocable or irrevocable, depending on the amount of control the creator of the trust desires. On the other hand, a will goes into probate, requiring court supervision of your property over a longer period of time. Diligently exploring your estate planning options can help make the process more manageable.

Losing a spouse can leave you vulnerable and bereft. Unfortunately, while dealing with this grief and loss, you will be forced to make critical legal and financial decisions. Some immediate priorities after the loss of a spouse include gathering documents; notifications; and update accounts, registrations, and beneficiaries. It is important to gather all relevant documents—such as death certificate, insurance policies, and list of assets—and send out notifications that notify people and business institutions of the death. Additionally, all joint accounts will need to be retitled, and any other accounts will need to go through probate. You should meet with your planners to update financial plans, take into account liquidity needs, assess risk tolerance, and discuss future goals.

Divorce and remarriage do not eliminate further legal entanglements. There are three important steps to keep in mind. Once your divorce finalizes, update your will. While you may not want to completely cut your ex out of your will, you should remember that most states’ laws automatically change a will, specifically voiding the bequest of property to your ex. Similarly, you will need to update your insurance forms and retirement accounts with new beneficiary information because they too automatically eliminate your ex-spouse’s inheritance. Additionally, you will need to grant legal parenting rights to your new spouse as desired. All of these steps are important to remember in the elevating times of divorce and remarriage.

An irrevocable life insurance trust (ILIT) can help provide liquidity to pay estate taxes, safeguarding your assets for your family. When you set up an ILIT, the trust is a holding vehicle for life insurance that removes the policy death proceeds from your estate when you pass. These trust held assets are immune from probate and estate taxes, making them a valuable estate-planning tool. There are some important considerations to keep in mind when deciding to create an ILIT.

First, you must clearly define your wishes as to how the trust assets will be distributed at death. Next, it is important to remember that the trust increases your liquidity without having to add other assets, like stocks and investment property, allowing you to maintain control over those assets while the ILIT builds value. Finally, you should put forth diligent consideration on who will be the trustee for your ILIT because they must have the willingness and ability to carry out the terms you set forth.

A slayer statute denies an inheritance to a beneficiary who killed the deceased individual. More specifically, is a murder conviction required to trigger the statute? In Stephenson v. Prudential Insurance Co., a deceased Mr. Rigby owned a life insurance policy that named his partner, Mr. McGriff, as the beneficiary. Rigby ended up dying after a physical altercation between the two. The insurance company in charge of the funds filed an interpleader, allowing the court to determine the outcome of the competing claims between McGriff and Rigby’s estate. At trial, McGriff argued that because he was not charged in the death of Rigby, the slayer statute did not apply to him. The court ruled that a murder conviction is not required to determine the applicability of the slayer statute, only the court’s determination that the beneficiary “more likely than not” wrongfully caused the death of the decedent.

Surviving spouses have several decisions to consider when inheriting IRAs. If a surviving spouse under the age of 59 ½ is the beneficiary of an IRA, he or she should consider placing the funds into an inherited IRA, allowing the beneficiary to take distributions from the account with no requirements. If the beneficiary wishes to roll over the inherited IRA into a personal IRA, the beneficiary must keep records and be restricted on the amount withdrawn for a minimum of five years. Additionally, there are limitations for taking distributions for which a 10% penalty will apply.

Financial advisors are slowly being viewed as the orchestrators of all the various financial planning components of a client’s life, such as asset management, estate planning, legacy building, long-term care planning, and insurance. There are two main principals driving this change—advisors wishing to differentiate themselves and retirees entering the distribution phase of their financial life cycle. Accordingly, there are four ways that advisors can be of value to their aging clients.

First, advisors can provide a holistic view of insurance, helping clients plan for every stage of their insurance needs, especially long-term care and health insurance. Second, estate planning is an essential aspect of post-retirement; therefore, advisors should be able to provide robust estate planning capabilities. Third, clients at this stage will need to prepare for any possible disability care, which will give clients a sense of empowerment over their inevitable futures. Finally, advisors should help wealthy clients apply tax-advantageous strategies to reach their charitable goals and legacy aspirations.

In Collister v. Feller, a Washington court of appeal concluded that a man who was named as his ex-wife’s beneficiary on her life insurance policy is not required to distribute proceeds to later beneficiaries named in her will. A testator can only direct the distribution of life insurance proceeds to be payable to the testator, estate, or personal representative. The ex-husband in this case was named as the personal representative, and the will was not eligible to direct proceeds.